Contracts II Outline
Chapter 3
I. Section 5 Effect of Adopting a Writing (456)
A. Introduction
1. Effect on contract of written agreement. K in statute of frauds must be in writing, part performance, promissory estoppel. If we have a promise in PA – different, UCC, $500 or more requires writing. How does the fact that a contract could be writing change it?
2. What about writings that modify earlier K’s? {Parties can modify contracts.) K1 as modified by K2. Needs consideration, formality, promissory estoppel, or prior material benefit.
3. Would be true if K1 is oral or in writing and would be true if K2 is oral or in writing. Statute of frauds: K that is originally oral may fall within it. Modification could become ineffective if K2 falls within statute.
4. No Oral Modification Clause (NOM) -0 What if the original K is in writing and says any modification in future must be in writing? C/L – NOM is totally ineffectual. Does not work! Parties cannot by K undo what they want to do later. Under C/L, parties can agree to modify orally.
5. NOM – Unenforceable if there is a subsequent oral K.
6. Parol Evidence Rule – Precludes admission of oral or written agreements. Not evidence rule, has to do with admissibility of evidence and intent of parties.
a. If K1 is oral and modification is oral, there is no PER issue
b. If K1 is in writing and K2 is oral, there is no PER issue
c. If K1 is oral or in writing and K2 is in writing, there could be a PER issue
d. If you leave out UCC, nothing before matters, but if it is written K, we must wonder whether prior negotiations were supposed to be included. Did the parties intent to include prior negotiations in the writing?
7. PER – If the parties enter into a K with intent to integrate their negotiations then no evidence of contemporaneous negotiations can be used. (partial or complete?)
8. What is purpose of PER? – 1. trying to effectuate the parties intent. 2. Controls juries – focus just on the written K. 3. Helps avoid fraud or perjury (doesn’t help much though)
9. How do you approach a PER problem? –
a. Is there a written K?
b. Was the writing intended to be a complete and final expression of the rights and duties of the parties? (integration issue – intent)
c. PER declares that prior negotiations (extrinsic evidence) should be inadmissible
d. Numerous Exceptions – If we don’t’ exclude evidence, jury must decide whether to admit it. To admit the evidence is not saying that it took place – it’s for the jury to decide. To not admit evidence –it says parties’ intent supercedes prior negotiations.
B.Hypo #1: Potential tenant looks at apartment, empty with appliance and couch. Tenant asks if couch is included, (it’s not,) but says he wants it. Landlord says I’ll sell if for $100 and tenant says okay. Lease agreement says $400/month, no mention of couch. Couch is not there, tenant sues.
1. Apply Test – Not apparent that one was condition of other.
2. Tenant says – not same, two separate transactions, distinct types of property.
3. PER overruled – P can now introduce evidence
4. Williston “two entirely distinct contracts, each for separate consideration, may be made at the same time and will be distinct legally.
C. Hypo #2: Same facts, but instead, landlord says this is a 12
??)
2. Is it an integration? Is it partial or total?
3. Landlord raises PER, tenant says we need to show evidence to look at PER. Doesn’t Jury hear this evidence? Sometimes not. They may have to present evidence twice or court may instruct jury whether to use it or not.
F.Hatley v. Stafford 1978 (464)
1. For an oral term to be consistent with a writing, thereby barring its admission as evidence under the parol evidence rule, it must be contradictory to an express provision contained in the writing.
2. Complete or partial integration is a matter for court to decide. The parties thought it was up to the jury.
3. Judge/Jury split – (footnote 2, page 466) question for judge to decide.
4. Merger clause – This lease contains complete and final statement of intent of parties. If you use rental, does not preclude other aspects of agreement. If you use all agreements, it includes those agreements.
5. Inconsistent: (narrow view) Must contradict an express provision in the writing
a. Implied in law – reasonable time for example
b. Implied in fact – relations between parties, trade custom.
c. Hatley says we don’t’ include implied terms! (express only)
G. Hayden v. Hoadley 1920 (470)
1. Agreement includes terms that are implied in law but not in fact
RSC 2d – (Implied in law and in fact)
